NBA PM: Why Dwight Howard Chooses Houston
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Portland Trail Blazers rookie Damian Lillard was easily the best new addition to the NBA this season. In his exit interview, he talked about his most memorable moment of the year, the opportunity the Blazers gave him, when he figured out that he could deliver the game-winner consistently, his expectations for next season and more.Watch More Video Here
Dwight Howard: The Case For the Houston Rockets
The Los Angeles Lakers are two losses way from an early exit from the 2013 NBA Playoffs, and even as the team suffers through the end of what has been, at best, a trying season, all eyes are (still) on Dwight Howard. Will he stay? Will he go? Will he agree to terms with one team, then sign with another, then try to say he didn’t mean to . . .just how crazy with the situation be?
The entire NBA will breathe a sigh of relief once Howard finally determines where he will play basketball for the foreseeable future.
The two teams that seem most likely to land Howard long-term are his current team, the Lakers, and the team that would most love to have him, the Houston Rockets. The Rockets could have the cap space to sign him and they offer arguably the best supporting cast to put around him. James Harden has emerged as one of the best shooting guards in the NBA, Chandler Parsons is one of the most underrated players and is the ultimate X-factor, and Jeremy Lin and Omer Asik have been solid this season.
The arguments for the Lakers are much more straightforward. First and foremost, they are the Lakers, the gold standard of basketball around the world, the most popular NBA team of all time. Playing for the Lakers means playing in the brightest spotlight in a world of bright spotlights, and that is not something to be walked away from lightly. And then there’s the money factor. On the surface the Lakers can pay Howard quite a bit more money than anyone else, but in the case of the Rockets, that’s not quite true, all things considered.
Here are the salary comparisons, thanks to HOOPSWORLD’s Eric Pincus:
Approximate Yearly Salary with the Lakers:
Year 1: $20,513,178.00
Year 2: $22,051,666.35
Year 3: $23,590,154.70
Year 4: $25,128,643.05
Year 5: $26,667,131.40
Approximate Yearly Salary with the Rockets (or any other team):
Yes, when looking at the numbers alone, the Lakers clearly have the advantage over any other team looking to lure him away. In the case of a Texas team like Houston, however, there are some significant factors that have to be considered. Texas has no state income tax, and for someone making better than $20 million a year, that’s a huge consideration. Just look at how the California income tax breaks down over the first four years of the contract:
Year 1: $1,075,666.03
Year 2: $1,156,340.98
Year 3: 1,237,015.93
Year 4: 1,317,690.88
If we look at the first four years of the contract, Howard would make $3,692,371.44 more with the Lakers than he would with the Rockets. Adjusting that number for California’s state income tax, however, Howard would actually make $1,094, 342.38 more as a Rocket playing the majority of his games in a state with no income tax because he would save $4,786,713.82 in taxes.
As for the fifth year, the Lakers certainly have an advantage in being able to offer Dwight more long-term security, but unless he suffers a career-ending injury he is going to sign a contract after this one, meaning he will get paid for that fifth year wherever he plays. He would most likely have an opt-out, anyway, meaning the fifth year is not really a major bargaining point, again, barring injury. For what it’s worth, Howard would pay $1,398,365.83 in state income tax in California if he were to play out the end of that deal.
The other factor involves where games are played. NBA players pay 1/82nd of their income tax to the states where they play, providing those states have state income tax. As a member of the Rockets, Howard would play all of his home games and the highest possible number of his away games in states with no income tax. Texas is obvious, with the San Antonio Spurs and Dallas Mavericks in the same division, but there are also two games in Tennessee and two games in Florida, the other NBA states without income tax for a total of 49 games each season. As a Laker, Howard would only play ten games in those states.
The comparison doesn’t end with state income tax, however; the cost of living must be considered, as well. Manhattan Beach is the place to live in LA, and high end houses in that posh part of California runs $1,101 per square foot. How does that compare to, say, The Woodlands in Houston, the correspondingly cool place to live? A high end house in The Woodlands would run just $108.00 per square foot, or roughly one-tenth the cost of its counterpart in Manhattan Beach. Additionally, the salary indicator based on cost of living demonstrates that in order to make the equivalent of $20 million in Houston you have to make $30,330,020 to live comparably in Los Angeles.
That’s a staggering difference!
The other argument that people like to make in favor of the Lakers is that Howard could potentially make a great deal more money through endorsements in Los Angeles than he could elsewhere, and while there might be a little bit of truth to that, it’s not as big as people think. The national brands like adidas will find him wherever he is, like they found him in Orlando. The smaller local endorsements are just as plentiful in Houston as they are in Los Angeles, and again, no state income tax comes out of the Houston deals. Additionally, a company looking for a Lakers endorsement are still going to call Kobe Bryant first; in Houston, Dwight would own the space. He would also get to spend time working with and learning from Hakeem Olajuwon, who still calls Houston home.
Does all of this mean that Houston is the frontrunner in the Dwight Howard sweepstakes? Hardly. The number one reason for Dwight to stay in Los Angeles is a reason with which the Rockets can’t compete. The Lakers are still the Lakers. If the money details don’t matter and it’s all about global branding, the Lakers are second to none and that’s every reason why they will more than likely keep Howard in town long-term. There’s also the issue that the Rockets have to clear cap space to sign Howard to the max, while the Lakers can go over the cap to re-sign him. Given that the salary cap is roughly estimated to be $60 mil next season, the Rockets project to have $17,781,453 in cap room this summer, which is well short of Howard’s max. Houston would need to trade or otherwise dispose of a couple of players to sign Howard.
Still, there is a compelling case to be made for Houston. The Lakers may be the favorites, but the Rockets hope to at least give Howard something to think about.
Charlotte Bobcats’ Woes On Jordan?
As the top eight teams in each conference battle it out for postseason supremacy in the NBA, there are 14 other teams who are, to one degree or another, trying to figure out what they need to do next. None are faced with as many issues as the Charlotte Bobcats, who are faced with yet another summer of rebuilding.
In theory, the Bobcats went about rebuilding the right way, though it can be and has been argued that breaking up their one and only playoff team was a mistake. Once that decision was made, however, the Bobcats did what most rebuilding teams do . . .they lost a bunch of games. Through the process of losing a team us able to garner high draft picks, with the idea being that those draft picks will turn into players like Kevin Durant, Russell Westbrook and Serge Ibaka, the way they did for Oklahoma City Thunder. That’s who the system is set up to work.
Unfortunately, not every draft has a Kevin Durant, or even a Russell Westbrook. Still, the Bobcats have wasted draft picks like few other teams have ever done, drafting the likes of Sean May, Adam Morrison, and Alexis Ajinca, to name a few colossal mistakes. They got it right when they took Raymond Felton with the fifth overall pick ion 2005, but they let him walk away. This season he helped lead the New York Knicks to the second-best record in the Eastern Conference. The Brandan Wright pick was a good one in 2007 because it turned into Jason Richardson via trade with the Golden State Warriors, so score one for Charlotte. Jared Dudley was a solid pick at 22 in 2007, but of course he wasn’t around for long. DJ wasn’t a terrible pick at nine in 2008, but Brook Lopez or even Roy Hibbert would have made more sense, and both were chosen after Augustin.
Put Raymond Felton and Brook Lopez in Charlotte and you’re probably looking at a playoff team, especially with Stephen Jackson and Gerald Henderson in the mix. But that’s water under the bridge, right? As is giving up Tobias Harris and Jackson for Bismack Biyombo and drafting Michael Kidd-Gilchrist over Bradley Beal, Harrison Barnes and . . .cough, cough . . .Damian Lillard. Sure, Kemba Walker is a nice player, but you’ve got to draft the best player when you’re in Charlotte’s situation. Walker could back up Lillard and set the PG position for years to come.
This year, it’s unlikely the Bobcats will completely blow it in the draft, because there doesn’t appear to be a franchise player in the entire class. But what that means is they’re faced with another year of losing, and with yet another head coach at the helm. Mike Dunlap was certainly an outside the box choice last year, but firing after one year was as inside the box as you can get. When the team fails, fire the coach. Maybe the fans won’t blame management.
Will that work next year, too?
The bottom line is that the Bobcats, through a long series of GMs and head coaches, have one common denominator in their losing habit: team owner Michael Jordan.
Generally speaking, the more involved a team owner is in the personnel decisions of his team, the worse off the team is. Paul Allen is notorious for meddling in Portland, Mark Cuban has been fortunate to have Dirk Nowitzki to bail him out year after year in Dallas (until this year), and Jordan might just be the worst of the worst. How often do you hear about the owner of the OKC Thunder, the Miami HEAT or the San Antonio Spurs in reference to roster decisions?
It’s time for Michael Jordan to let the basketball people run the basketball team. Until he does, the Bobcats are very likely to continue to wallow in mediocrity . . .if you can even call them that.
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